Prices for U.S. homes may climb as soon as the third quarter, ending declines as foreclosures decline make more home available for sale, Housing and Urban Development Secretary Shaun Donovan said.
“It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN.
“The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”
Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said.
“In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.”
Ahh, but there's no reason to believe that's true. The May housing numbers out from a couple weeks ago proves that.
Sales of previously owned U.S. homes hit a six-month low in May and supply rose, pointing to a housing market still struggling to regain its footing.
The National Association of Realtors said on Tuesday that sales slipped 3.8 percent month over month to an annual rate of 4.81 million units, the lowest since November.
It was the second straight month of declines. The drop was smaller than economists had expected, but the April sales figure was revised lower, leaving a report that was largely in line with expectations in financial markets.
Supply of housing is still 9.3 months and rising. Housing prices continue to fall as foreclosures are still swamping the market. There's no reason to believe housing prices will hit bottom anytime soon, especially as soon as this summer. That's just wishful thinking.
Unfortunately, it's the Obama administration making this stupid claim, and it's going to be used by the GOP against the President when it doesn't pan out.
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